It’s been an interesting few months. We’ve killed some tyrants, some terrorists, and we’ve discovered that some of the “stronger” members of our esteemed single European Currency aren’t as strong as they first appeared. What does it all mean though? Will it affect you or me? Will your money be worthless soon? Simple answer, probably not a lot to the individual, and not much in the short term. The longer term is interesting, and a rather awkward looking place though.
So first the politics, followed by a bit of economic opinion. The tyrants, terrorists, or whatever you want to call those people who we have deemed to cause atrocities to humanity either at home or abroad, have in some part been removed. I do question what right we had to go in and hunt down Gaddafi. Equally, did we need to spend 11 years hunting down a man by wrecking the country in which we believed him to be along with a bunch of others in its vicinity? Or could we have actually used the technology we’ve developed, and the skill that we have in our “allied” armed forces (I use the term “ally” loosely – allies in my opinion are like the best of friends; you share everything that you know). Overseas, the fall of Gaddafi will have a profound impact on North Africa, especially since it has happened whilst the region as a whole has been engaged in rebellion. It will be seen as the start of a new era, but it will take some years for the effects to ripple down to the poorest and most affected by the outgoing regime. It will become a democracy, because we in the West dictate (ironically) that it should do so. Most importantly, things will improve for people in the region, as things have reportedly started to improve in both Afghanistan and Iraq – I don’t speak from experience as I’ve not been, and can only rely on what I read across a breadth of media outlets. If you’re reading from the region and you think differently, I’d love to hear your thoughts.
Next comes our relationship with the Euro. And why does it affect us? It doesn’t, directly. We’re not a Euro zone member, though we are part of the greater European Community. The reason the UK is affected is through existing money plied in to the effort to stem the tide of inflation, and to increase flow of money from banks to business – we have a large amount invested in the Irish recovery, and the Irish are part of the Euro zone. That means that we now have a vested interest in keeping the Euro afloat. It certainly won’t be easy. Greece lied about it’s financial stability when it joined the Euro. Italy is (or was, but the aftermath is a long and winding road) corrupt to the point its economic status was completely falsified. Supposedly as strong as Germany, we have recently found that to be somewhat less realistic than even the worst case scenario we’d previously envisaged. So what happens if the Euro doesn’t collapse, and what happens if it does, and what does that actually mean for us?
We’ve historically seen individual economies collapse under the strain of their own currency. Italy itself, with the old Lira, Germany and Turkey in the past, as well as the Yugoslav Dinar have all seen hyperinflation and subsequent collapse. That’s just in Europe, and Chile, Zimbabwe, Argentina amongst others have seen similar collapse outside. In my opinion, a single currency across such a diverse set of economies was never going to work without somehow first bringing incoming economies to similar levels of stability. Currency only works when there is something to compare it to, or we’re back to bartering (which might be a better option). It’ll be years before the likes of you or I see the ripple effect of the eventual demise of the Euro. Governments will first feel the strain as each one tries to minimise the effect on its populace, and each will in some way fail. Greece and Italy are unfortunate, but they’re almost collateral in the bid to resolve the problem. They’ll found new economies and will either become strong or not. Germany is one of the strongest economies in Europe, and has previously seen two world wars demolish it along with a complete failure of its currency.
The media often portray a picture that few of us understand in a way that makes us think that the world is about to end. It isn’t. We’ll bounce back. We have before, we will again, and the fallout will undoubtedly serve to teach lessons the world over. In trying to emulate the USA and the Dollar, Europe has failed, but it has failed because it started from a complex economic structure in the first place. America founded the dollar very early in its constitutional history and has become a force to be reckoned with. Britain has been shot across its bows, and while mildly burnt, people here won’t feel the pain anywhere near as much as those within the zone. Likewise with the political side – it won’t affect any one of us directly. The greater good has supposedly been achieved, but we’ll see what that really means in time to come.